Monday, October 29, 2018

Mumbai: Cash crunch! Yes, the money is tight at the Naresh Goyal led airline! This is the situation at Jet Airways, which is notably the second largest airline in terms of market share in India after Indigo. Each day Jet Airways is facing new problems which has made it difficult for the airline to even survive. Almost everything in Jet Airways right from the bottom-rung employees to the pilots and more are all sending 'may day' signals. So is the case even with Jet Airways share price, which has tumbled by 51% from August till date. The situation is definitely on of emergency and the airline has tried various ways to find solutions, even bizarre ones. A background check: The airline first asked its own employees to agree to a salary cut, then it delayed salaries, grounded a few jets, but all in vain and now the airline finds that its debt obligations are maturing to the tune of Rs 22 billion this year. The airline has a total debt of Rs 73.6 billion, with a strong staff of 16,000 people.

The Jet Airways situation suggests that its cash flow is very weak at the moment. This is something to be blamed on rising aviation turbine fuel cost, lease rentals expense, depreciating rupee, fare war among domestic carriers and many other high expenses.

Many media reports have started mentioning that, Jet Airways founder Naresh Goyal has even knocked on the doors of some of Asia’s richest people namely Reliance Industries Mukesh Ambani and Tata Group veteran Ratan Tata. Goyal, who owns about 51% stake in Jet Airways, asked for Tata’s help a few days ago to survive.

Not only this, Jet Airways has even appointed Goldman Sachs Group and Boston Consulting Group (BCG) as advisers for revival plan, as per reports.

Then there are reports, which have mentioned that many are interested in buying a stake in Jet Airways. In the list, the first in line are the Tatas, which already manages Vistara airline.

Now, another contender has been added to the list. In latest development, today it was revealed that the UAE-based Delta Air Lines has also shown interest in the company.

According to a Financial Express newspaper report, Delta may purchase 24% stake which is currently held by Abu Dhabi’s national carrier Eithad Airways. While it is believed that Tatas may pick some of the stake of Goyal in Jet.
30/10/18 Pooja Jaiswar/ZeeBiz